(Yicai) Nov. 5 -- China’s new energy vehicle owners are being confronted with astronomical costs to replace batteries and other auto parts as warranty periods start to expire, with power packs costing more than the value of the car itself in some cases.

There has been a stream of news reports about high-priced after-sales support for NEVs since 2022. One plug-in hybrid that cost CNY500,000 (USD70,355), for example, required a new battery priced at CNY300,000, while the replacement battery for an overseas brand's all-electric sedan that cost about CNY200,000 was an eye-watering CNY500,000.

“I spent CNY250,000 to buy my car, but replacing the battery costs CNY120,000, almost half the price of the vehicle,” one owner, whose NEV was damaged in an accident, told Yicai at an authorized service store in Shanghai.

The difficulty and high cost of NEV repairs have also pushed up insurance premiums compared with similarly priced fossil-fuel powered cars, with some insurers even refusing coverage for certain NEV brands.

By next year, there will be 49 million NEVs on China’s roads, according to market research firm Gartner. The three-year vehicle warranty and the eight-year 150,000 kilometer battery warranty for the autos sold in 2020 when NEVs first started to become popular will expire soon. News reports about exorbitant replacement and repair costs are likely to snowball.

Many consumers do not understand why it is so expensive to replace an NEV’s battery when power pack prices have been falling over recent years. The reasons for the high cost are two-fold, according to Chen Lin, who manages an authorized NEV repair center.

First, the battery costs more than the car's engine and gearbox, he said, noting that if an NEV battery cell fails, the solution is often to replace the entire power pack, whereas with fossil fuel-powered engines, only the damaged part needs to be changed.

The second factor is the monopoly held by NEV firms, Chen said. Due to safety concerns, NEV makers set very high requirements for third parties to access their battery systems, giving them strong pricing control, he said.

Chen pointed out that while a 60-kilowatt-hour lithium-ion battery pack could cost an NEV maker between CNY50,000 and CNY60,000 (USD7,035 and USD8,440), car owners are charged CNY120,000 for a replacement.

Automakers and battery producers are all building their own after-sales support systems, leading to a near monopoly on NEV repairs, said Liu Wei, a technical director at one car brand’s aftermarket 

Editors: Liao Shumin, Kim Taylor